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mysterysoup
Level 2

Allocating bulk purchases to different expense accounts

Hello, I've searched the forums for an answer to my question but can't seem to find one that's relevant. I'm looking for help in determining the correct way to allocate bulk non-inventory purchases to different expense accounts.

 

We buy fertiliser and other farming supplies in bulk and keep them in our store until they're used. We then use them on different crops throughout the season. Since we don't sell the fertiliser they're not an inventory item, but I'm having trouble with the right way to account for the purchase in bulk, and then allocate them as they're needed to the appropriate crop to get an accurate COS on the crop. 

 

Any help would be greatly appreciated.

Solved
Best answer October 21, 2020

Best Answers
mysterysoup
Level 2

Allocating bulk purchases to different expense accounts

Hi @AlexV,

 

Thanks. I don't think that works for allocating specific amounts of an item. I guess I'll have to set the supplies as inventory and do inventory adjustments to allocate to different crops as they're used. Not the best method but the only thing I can think of.

View solution in original post

6 Comments
Candice C
QuickBooks Team

Allocating bulk purchases to different expense accounts

Good Evening, @mysterysoup

 

I hope you're having a great Monday so far. I can provide some additional information about how to allocate bulk non-inventory purchases to different expense accounts. 

 

Let's add the purchasing info for the non-inventory items. By doing this, you'll be able to track how much you spend on a product or service. 

 

Here's how: 

 

  1. Go to the Sales tab in the left-hand menu bar. 
  2. Choose the Products and Services portion. 
  3. Locate the product and press Edit in the "Action" column. 
  4. Hit the I purchase this product/service from a vendor option. 
  5. Enter a description. Note: This will show on purchase orders, bills, and other forms you send to vendors. 
  6. Add the Cost.
  7. From the Expense Account drop-down menu, select the account you want to use to track the cost of things you sell. 
  8. Pick a vendor. 
  9. When you're ready, tap Save and Close

 

It's a simple process. You can learn more about adding your products and services to QuickBooks Online in this article. This guide has a video plus additional details that can be helpful for your business. 

 

Should you need any further assistance, don't hesitate to ask. I'm always here to lend a helping hand. I hope you have a great rest of your Monday! 

mysterysoup
Level 2

Allocating bulk purchases to different expense accounts

Hi @Candice C,

 

Thanks for your reply. I'm not sure it's quite what I was looking for, let me explain better. Say I buy 100 tons of fertiliser from a single supplier using a single purchase order, and keep it in a store room. The following week I use 10 tons in our potato crop, and the week after that I use 5 tons in the carrot crop. How do I allocate 10 tons of the purchase order to the potato crop, and 5 tons to the carrot crop? 

 

Should the fertiliser be an inventory entry, or non-inventory since I'm not selling it? 

 

Sorry if it's a simple question but I'm having a bit of trouble with this.

Rubielyn_J
QuickBooks Team

Allocating bulk purchases to different expense accounts

Let me provide some details about inventory and non-inventory items in QuickBooks Online, @mysterysoup.

 

In QuickBooks Online, it’s easy to track how much you make and spend on each product or service. Non-inventory items are products you buy or sell but don't track quantities. If you want to track product quantities, add them as inventory items.

 

To allocate a purchase to a different expense account, add a service or product’s purchasing info. I'll show you how:

  1. At the left panel, choose Sales, and then select the Products and services.
  2. Look for the product or service on the list and select Edit in the Action column.
  3. Select I purchase this product/service from a vendor.
  4. Add a description and the Cost
  5. Select the Expense account ▼ dropdown and then the account you use to track the cost of things you sell. Make sure to use a different expense account
  6. Select your preferred vendor.
  7. Once done, click Save and close.

I've also added this article with helpful insights on the things you buy and sell, and the status of your inventory: Use reports to see inventory status and performance.

 

Feel free to add a comment below if you have more questions about managing products and services in QuickBooks. I'm always here to help. Stay safe and well!

mysterysoup
Level 2

Allocating bulk purchases to different expense accounts

Hello @Rubielyn_J,

 

Thanks for your reply. I guess Quickbooks online doesn't have the functionality I'm looking for. It's difficult to input the Cost amount because we buy supplies from different vendors at different costs, so I'm looking for a way to allocate the amount of fertiliser to a specific crop, not the cost. It seems like it should be feasible for QB to offer a way to allocate supplies quantities purchased in bulk to different expense accounts. 

AlexV
QuickBooks Team

Allocating bulk purchases to different expense accounts

Good day, mysterysoup.

 

Thanks for the reply!

 

You'll want to use the class tracking in QuickBooks Online so you can record the allocation per crop. Also, you can visit the Apps tab to see if there's a third-party application that has this feature you need.

 

If you need more help, leave a comment again. Wishing you all the best!

mysterysoup
Level 2

Allocating bulk purchases to different expense accounts

Hi @AlexV,

 

Thanks. I don't think that works for allocating specific amounts of an item. I guess I'll have to set the supplies as inventory and do inventory adjustments to allocate to different crops as they're used. Not the best method but the only thing I can think of.

View solution in original post

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